Gilead – Reducing The Cost Of HIV Medication

Gilead Sciences, the leading maker of HIV drugs, is to share intellectual property rights on its medicines in a patent pool designed to make treatments more widely available to the poor.

The California-based group is the first drugmaker to sign up to the new Medicines Patent Pool, whose organizers now expect other major pharmaceutical manufacturers to join the initiative.

Ellen ‘t Hoen, the pool’s executive director, told Reuters she was negotiating terms for similar deals with ViiV Healthcare — a GlaxoSmithKline and Pfizer joint venture — as well as with Bristol-Myers Squibb, Roche, Boehringer Ingelheim and Sequoia Pharmaceuticals.

“This is not just a one-off. The whole field is changing … there will be more to follow,” she said.

The Medicines Patent Pool, launched by the UNITAID health financing system that is funded by a tax on airline tickets, aims to address this problem by creating a system for patent holders to license technology to makers of cheap generics in exchange for modest royalties.

In the case of Gilead, the agreement allows for the production of generic copies of tenofovir, emtricitabine, cobicistat and elvitegravir, as well as a combination of these products in a single HIV pill known as the “Quad.”

“Through systematic licensing of intellectual property related to HIV products, people in developing countries will have access to low-cost versions of those products almost at the same time that people in rich countries do,” ‘t Hoen said.

Traditionally, patients in developing countries have to wait for years before they can get access to new drugs.

CHANGE IN ATTITUDE

Gilead will receive a 3 percent royalty on generic sales of tenofovir, which is also approved for use in hepatitis B, and 5 percent on the other products.

The licenses will allow for the supply of tenofovir and emtricitabine in 111 countries, for cobicistat in 102 countries, and for elvitegravir and the Quad in 99 countries.

Assuming other companies come on board, the patent pool could save poor countries more than $1 billion a year in drug costs.

But the revenue stream to Gilead and other patent holders is likely to be small, since generic drug prices in Africa could be just 1 or 2 percent of those in high-income countries.

The decision by Gilead and others to work with UNITAID on the new patent pool marks an evolution in thinking by Big Pharma toward the thorny problem of drug access in the developing world.

Ten years ago, the world’s pharmaceutical industry took a very different stance when it sued South Africa over legislation that was passed by former President Nelson Mandela and which favored generics.

That battle proved a public relations disaster, and since then individual companies have struck a series of voluntary licensing deals, allowing generic copies of HIV products on a case-by-case basis.

The patent pool system, however, goes beyond this by providing an effective “one-stop shop” for generic firms to secure rights to manufacture patent-protected drugs.

The U.S. National Institutes of Health became the first organization to sign up to the pool last September. The concept has been harder for some drugmakers to swallow.

ViiV, for example, was initially unwilling to consider pooling its patents — and Abbott Laboratories, Merck & Co and Johnson & Johnson have yet to enter formal negotiations, although ‘t Hoen said her team was now discussing the idea with all three companies.